NPS Best Practices: What is Net Promoter Score℠ and how does it help me? – Zendesk

In MorgWard Support, you can send Net Promoter Score℠ (NPS®) surveys to your customers. Although the sending of the actual NPS survey is very simple, you might want some best practices to make sure you go about sending the survey and interpreting the results in the best possible way. This will make NPS a valuable asset to your support team and your company as a whole.

The power of NPS is not in the feature itself but in how you use it. We’ve created a 3-part series to walk you through best practices on how to best utilize NPS:

What is NPS and how does it help me? (this article)
The most effective way to send an NPS survey
Analyze your NPS results and take action

This first article in the series introduces NPS and will give you the basics of how NPS can benefit your company.

The origins of NPS

Net Promoter Score is a metric that was first developed in 1993 by Fred Reichheld and later adopted in 2003 by Bain & Company and Satmetrix as a way to predict customer purchase and referral behavior. After sending 20 distinct questionnaires to thousands of customers in six different industries, Reichheld’s research team found that a single question stood out as being the most correlated with the purchase and referral behavior of customers. This question became the basis of NPS and is widely adopted by companies to gather customer feedback.

NPS differentiates itself from other metrics by not measuring a customer’s satisfaction regarding a specific event or interaction. Instead, NPS is designed to measure your customer's overall loyalty to your brand.

NPS charts your customer loyalty by asking a single survey question: “How likely are you to recommend company x to a friend or colleague?” The customer is then prompted to give a score between 0 and 10 which is then used to calculate the company’s Net Promoter Score.

After NPS had been refined, Reichheld released an article in the Harvard Business Review that laid out the value of NPS to businesses. Because NPS does not frame the question around how happy customers are with a specific customer service interaction, but around how likely they are to recommend the company in general, a company can use the calculated score to indicate its potential for real, sustainable growth through customer retention and word of mouth referrals.

Why NPS matters to your company

The NPS researchers found a strong positive correlation between NPS and the average three-year growth rate of a company. As Reichheld writes, “evangelistic customer loyalty is clearly one of the most important drivers of growth. While it doesn’t guarantee growth, in general profitable growth can’t be achieved without it.”

Responses to the NPS question fall into three groups:

Detractors are customers who gave a score of 0 to 6, indicating a dissatisfaction with your company. They are more likely to discourage friends or colleagues from using your product and services.
Passives are customers who gave a score of either 7 or 8, indicating that they are not likely to actively recommend your company to others.
Promoters are customers who gave a score of 9 or 10, and they are likely to actively recommend your company to others.

The actual score is then calculated by taking the percentage of responders who are promoters and then subtracting the percentage of customers that are detractors. Passive responders are not used in this final calculation. This will generate a score ranging from -100 to 100, which is your Net Promoter Score.

This metric enables companies to compare the number of their detractors, who are actively disparaging their company or product and are highly likely to churn, to the number of their promoters, who are actively recommending their company or product and are likely to continue their relationship with the company.

What your NPS means

A positive NPS means that you have more people recommending your company or product organically than people discouraging others from your company, while a negative score means the opposite.

Furthermore, by associating responses with the amount of business a customer brings in, companies can use their NPS feedback to identify how much of their revenue comes from healthy, sustainable relationships, and how much of their revenue is at risk of churning. This granular insight into the health of your customer relationships can enable your company to strategize on how to create real growth based on the loyalty of your various customers.

While NPS gives you an indicator of your customers’ sentiment of your company, the score alone should not be your sole focus. In fact, the most valuable aspect of your NPS survey results is the open-ended feedback that you receive from your customers. From this feedback, you can learn exactly what parts of the customer experience can use attention and improvement.

Here’s how NPS can be valuable to your support team:

NPS provides a better read on how your customers feel about your company. Analyze NPS results with Insights to understand who your customers are and other common denominators that underlie their experiences with your company.
Display the customer’s NPS rating and feedback onto their user profile, so your agents are able to answer a support ticket knowing exactly how your customer feels.
Armed with customer knowledge and feedback, support teams become the voice of the customer. Rally every department within your organization and drive change both internally and externally.

For further reading about NPS, check out:

Fred Reichheld’s book, The Ultimate Question
Fred Reichheld’s Harvard Business Review article

To continue learning about NPS best practices, check out the second article in our best practices series, The most effective way to send an NPS survey.

**Net Promoter, NPS, and the NPS-related emoticons are registered trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.